There are certain expectations that everyone holds from the things they use. They may either be explicitly stated or maybe implied and understood by everyone. The explicit expectations or requirements might involve tangible characteristics while the implicit expectations tend to be regarding the very purpose of the product and to do with its quality. For example, when a man purchases a parachute, he does so with the unspoken expectation that it would meet the basic requirement of saving his life when activated as necessitated. These expectations help create value for consumers If the parachute was unable to perform its purpose, then it has no value to it. This value created by the implied needs of the consumer helps set a price for the product. A company’s product, which cannot meet such expectations of the customers at a reasonable price, will suffer low demand and inability to generate revenues. Thus, Supply Chain Management is key to meeting the price appropriate for the value the product provides to a consumer.

While deliberating award of important contracts, Major companies insist on ISO 9001 Quality Management System for their vendors and contractors. Latest version of the standard has gone one big step further in supporting the companies. ISO 9001 standard is intended to be a set of requirements that represent the good practices that form the basis of a Quality Management System. This makes the vendor’s management system transparent, allowing their customers to get an early visibility of quality that is to be delivered. Traditionally, companies that want to survive; assess and address risks and opportunities to their businesses as part of business plan through internal controls. When using the requirements from ISO 9001:2015 as a basis for your Quality Management System (QMS), you will find that risk-based thinking is an important new concept that has been brought into the forefront of quality planning.

Vendor evaluation processes within major companies pay specific attention to certain clauses of ISO 9001 standard, which have direct impact on the scope of supply. In order to support this, the standard has specifically introduced a requirement in section 5.1.2 Customer focus, wherein the QMS addresses the risks and opportunities that can affect conformity to scope of supply

Implied Needs Going into specifics of what can go wrong, let us now look into various typical expectations of the customer in the context of an oil field development projects. 1. Product to comply with the specifications 2. Product to be delivered on time 3. Product to be cost effective. 4. Product to meet implied needs (?) First three expectations are straight forward; these are easy to monitor. What are these implied needs?

The earlier definition of Quality included a statement about needs which are “stated” or “implied”. Most problems with Quality arise from needs that are “implied”. These are the needs or the promises that are “assumed” in the mind of the person receiving the product or the service.

Implied needs tend to vary depending on social, cultural, political or geographical differences. In certain markets, the customer need not categorically specify certain factors because such factors are mandatory under local regulations. Unfortunately, regulations are not consistent across the globe. For instance, an item ordered in USA comes with safety features. Customer need not specifically state them while ordering. If the safety feature is not built in, customer can sue the vendor. Customer has good chance of winning the law suite because he or she is fully supported by local regulations. This is not the case in several other countries where regulations are still in early stage for the particular type of product. It is left to the customer to check all the features before buying the item.

How does the customer deal with these? As a customer, I am interested in performance of the product. This can be either broadly stated by the customer or elaborated in detail. This is where the customer lands in trouble. He cannot state everything associated with the product. For instance, while buying a new car, customer expects tyres to be new. He need not state that. It is implied. On the other hand, fuel efficiency of the car is not implied. Customer has to clearly state the expected fuel efficiency of the car. Then comes the regulatory requirement. This tend to become really tricky.

Several times, the regulations are not directly benefitting the customer; therefore the customer does not pay attention while ordering the item. For instance, emission norm for automobiles is meant for the society. In countries where the norms are fully in force, the buyer need not state it as a requirement. It is the vendor’s obligation to comply with it. On the other hand, in some countries, such norms are still in formative stage. Vendors may offer products that do not comply with the norm to the market in such countries. Compliance to the requirement is not an implied need in the market. Buyer may have to pay a premium price to buy product that comply to the norm. In order to save cost, vendor may choose not to state the requirement. There is a big risk associated with such products. One fine day, the government may decide to introduce the regulation. On that day, the product becomes prematurely redundant. How does the customer tackle this risk? We will see this in the next article